An NFT investment is a risky move if you don’t have a good trading strategy. With this guide, you can dive into the specifics of buying and selling NFTs.
Non-fungible tokens (NFTs) have recently taken over the crypto market and increased in popularity. NFT traders are mainly involved in buying and selling NFT collectibles. These include digital art, physical art, real estate, and much more.
Many people are thriving by buying and selling NFTs. However, a key thing to note is that they use excellent NFT trading strategies. If you want to learn more about them, worry no more. Below is all the information you need.
Why Should You Use An NFT Trading Strategy?
Some people find it risky to invest in NFT collectibles because of unpredictable stock prices. However, NFT investment has been proving to be beneficial recently. This is because most people are mainly making profits.
You can also enjoy various benefits by adopting an NFT trading strategy.
Here are some of them to help you understand better:
- A trading strategy ensures a high return on your NFT investment
- It allows you to understand your previous performances
- Help you to maintain focus in different NFT market conditions
- The trading strategy offers long term benefits instead of short term
The Top NFT Metric You Should Know
Before we dive into the specifics of NFT trading strategies, you need to know a specific metric called volume traded. This term refers to the number of tokens you have traded for an NFT project within a particular period.
When the trading volumes are high, it means that the NFT project has high demand amongst collectors. When doing NFT trading, you should look for trading volumes to buy and sell NFT collectibles accordingly.
A key thing to note is that you can check the trading volumes through an NFT marketplace. This will allow you to know when a project is in high demand so that you can sell it.
The 3 Best NFT Trading Strategies
The primary aim of trading NFTs is to make massive profits. Here are the three best NFT trading strategies that can help you:
- Buy The Floor
Non-fungible tokens (NFTs) will now remain popular for a long time because of various trends. This is why you must learn the best and most effective trading strategy called buy the floor. You may have heard about it on social media, but now is the time to understand it.
A key feature of the buy the floor strategy is that you should buy an NFT when it’s at its floor price. This means that the project is at its lowest price. You can do this by using the trading volumes as a reference.
After that, you should wait until the trading volumes of that NFT project becomes high again. This is so that you can sell it at a new floor price higher than the one you bought the digital art for.
- Buy The Ceiling
This trading strategy is the opposite of the buy the floor because now you have to buy an NFT at its highest price. Thus, this technique is for only people with enough digital tokens.
Many NFT traders use this trading strategy because when the demand increases, the value of the NFT collectibles you own hits the sky. However, you should note that this strategy is riskier than the buy the floor. This is because few collectors buy high-priced NFTs.
However, some people have made a lot of profits buying and selling NFTs using this trading strategy. The top thing to remember is to invest in digital art that can quickly sell at skyrocketing trading volumes.
- Buy An NFT With Low Number Of Sellers
Many NFT traders have sold the same NFT collectibles in the marketplace. This is why it can be tough for you to find a buyer for your digital art or physical art projects.
Besides that, your prices may be more competitive than other NFT traders. This can further impact the number of potential buyers you can get. That is why a good trading strategy is to buy an NFT with few sellers in the industry.
With this NFT trading method, you can have more buyers on the NFT marketplace. Not only that, but you can sell the project at a high price instead of the lowest price. This will allow you to get a higher return on your NFT investment.
This is your complete guide to the best NFT trading strategies. Once you understand these three concepts, you can make massive NFT investment returns by buying and selling NFTs. However, note that every trading strategy comes with some risk. This is why you should do your research to find the proper technique for you.